latest sustainability reporting standard: BRSR

By Arooshi Dahiya

23rd September 2021

Sustainability or ESG (Environmental, Social and Governance) reporting is slowly becoming a mandatory requirement by investors and regulators across the world. We also see countries set their net-zero goals and create long-term plans to achieve them. One reason for this increase is the 129% increase in sustainability funds just over the last two years from USD 550 billion in 2018 to USD 1,258 billion at the end of September 2020.


The goal of an ESG report is to bring about more transparency for the stakeholders into the day-to-day operations of a company. Recently, even SEBI (Securities and Exchange Board of India) has put forth its regulation for ESG reporting. 


What is BRSR?


BRSR stands for Business Responsibility and Sustainability Report. The purpose of this report is to help investors, shareholders etc. evaluate a company’s ESG risks, practices and impacts and future-readiness by looking beyond just the financial numbers. And hence SEBI mandates the top 1000 by market capitalization listed companies to submit it alongside their annual reports.


While this report is voluntary for the financial year 2021-22, it will be a mandatory requirement for these top 1000 companies by market cap starting financial year 2022-23. Listed companies other than these 1000 companies can also voluntarily submit the report. 


The BRSR format specified by SEBI contains nine principles that cover a company’s ESG (Environment, Social and Governance) performance. The BRSR reporting is developed on the basis of National Guidelines on Responsible Business Conduct (NGRBC) principles and United Nations SDGs. The nine principles are:


  1. Businesses should conduct and govern themselves with integrity, and in a manner that is ethical, transparent and accountable.
  2. Businesses should provide goods and services in a manner that is sustainable and safe
  3. Businesses should respect and promote the well-being of all employees, including those in their value chains
  4. Businesses should respect the interests of and be responsive to all its stakeholders
  5. Businesses should respect and promote human rights
  6. Businesses should respect and make efforts to protect and restore the environment
  7. Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent
  8. Businesses should promote inclusive growth and equitable development
  9. Businesses should engage with and provide value to their consumers in a responsible manner


Furthermore, the disclosures against the above principles are divided into essential and leadership indicators wherein essential indicators are mandatory, must-have disclosures while the leadership indicators are more voluntary and in place for companies that wish to showcase their ESG leadership position.


How is it different from BRR?


BRR stands for Business Responsibility Report. In 2012, SEBI mandated the top 100 listed entities by market capitalization to submit a BRR as part of their annual report, this number increased to 500 listed companies in 2015 and 1000 listed companies in 2019. BRR was also a way to measure the ESG performance of a company. BRSR is different from BRR in multiple ways as the former focuses on both the qualitative and quantitative disclosures with specifying the essential and leadership indicators for each principle. 


How are companies preparing for it?


Our customers have already started setting up their sustainability teams. They plan to report in the current financial year to set the process within their company. They understand that these reports might not be perfect but executing the process once will help them chalk out the process for the coming years.


Our customers are also leveraging technology to streamline their data. We, at Oren, have built software to help them navigate through the nitty-gritties of creating an ESG data management process and the BRSR. We also run Sustainability Labs for their employees and business partners to guide them through the process.

Some of them are also eyeing the GRI (Global Reporting Initiative) to compete at the global stage. We help them make sense of the alphabet soup (BRSR, GRI, NVG, NGRBC etc.) and help them reach their sustainability goals.